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Election Issue Spotlight: “Junk” Insurance Makes a Pandemic Even Worse

By ROSEMARIE DAY and NIKO LEHMAN-WHITE

One of the most important responsibilities of the American government is to protect its citizens from harmful industry practices, from lead poisoning to dangerous pharmaceuticals to financial meltdowns. Its record is far from perfect, but government regulators usually act in good faith and in turn earn the trust of those they protect. As we head into Tuesday’s election, it’s important to shine a spotlight on the fact that the Trump administration has betrayed that trust yet again. They have allowed low-quality, unregulated forms of insurance called Short-Term Limited Duration Insurance (STLDI) to prey upon those who lost their jobs during this pandemic. Also known as “junk” insurance, this issue has gotten far less attention than the need to protect people with pre-existing conditions. But the consequences of its inadequate coverage can be just as devastating.

Only 57% of STLDI plans cover mental health care, only 29% cover prescription drugs, and virtually none cover pregnancy. These plans are also allowed to discriminate against the sick, which most do in order to save money. STLDI managed to penetrate the market through a combination of cheap prices, lucrative broker incentives, and deceptive marketing.

Consumers get very little back for their money with these plans. Plans on the Affordable Care Act’s exchanges must spend 80 cents out of every premium dollar collected on care. In 2018, the top five STLDI insurers spent only 43 cents.

Originally envisioned as short-term solutions to gaps caused by unexpected coverage loss, the Trump administration extended their maximum length from three to 12 months and allowed renewals that can essentially extend them to three years, thus drawing consumers away from the individual markets established under Obamacare. This was essentially a kick in the gut for the law, after the current administration was unable to win any legislative or court battles against it.

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Reducing Churn to Increase Value in Health Care: Solutions for Payers, Providers, and Policymakers

Saeed Aminzadeh
Niko Lehman-White

By NIKO LEHMAN-WHITE and SAEED AMINZADEH

Introduction
Every day and in every corner of the country, innovative health care leaders are conceiving of strategies and programs to manage their patients’ health, as an alternative to treating their sickness (see Figure 1).

The value-based contracts that have proliferated in this country over the past decade and which now account for about half of the money spent on healthcare allow these wellness investments to make good financial sense in addition to benefiting patient health.

However, a phenomenon in health coverage in the US is increasing costs, destabilizing care continuity and holding back the potential of value-based care. It prevents us from making the long-term investments we desperately need.

Understanding Churn

Churn refers to gaining, losing, or moving between sources of coverage. Every year, approximately a quarter of the US population switches out of their health plan. Reasons can be voluntary or involuntary from the perspective of the beneficiary (see Table 1) and vary from changes in job status, eligibility, insurance offerings, and preference, to non-payment of premiums, to unawareness of pending coverage termination.

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